Why do so many growth strategies fail to realize their aspirations, yielding either far less growth than expected or growth that generates no profits?1 And how can senior managers mobilize their organizations to create growth that is both sustainable and profitable? Our research and work with a range of companies highlights two requirements for profitable growth. Each is challenging in itself. To attain both together is rare, but highly lucrative.
1. Build an engine of growth—an integrated, mutually reinforcing set of growth strategies designed to deliver continuously escalating levels of performance. To do so, management must focus on questions like "How do we get better and better over time?" and "How do we translate every improvement into still higher targets, stronger capabilities, and superior sources of customer value?" This is a dynamic view of growth, and forging a great growth engine takes strong management; "satisficers" need not apply.
2. Proactively identify and manage the frictional forces that restrict profitable growth. This means eliminating, or at least minimizing, growth-induced bottlenecks, of which there are two kinds: imbalances across processes (between product development and order fulfillment, say), and bottlenecks within processes (such as overloaded testing resources in product development)....